Farm laws herald new era of market freedom: ES
January 29, 2021 16:43
The government's annual Economic Survey on Friday strongly defended new farm laws, saying they herald a new era of market freedom which can go a long way in improving lives of small and marginal farmers in India.
These legislations were designed "primarily" for the benefit of "small and marginal farmers", which constitute around 85 per cent of the total number of farmers and are the biggest sufferer of the "regressive" APMC-regulated market regime, the survey said.
The pre-budget document defended the farm laws in the backdrop of long-running farmers' agitation at various borders of the national capital seeking repeal of these legislations expressing concern that they are pro-corporate and could weaken government regulated mandis, also called Agriculture Produce Marketing Committees (APMCs).
"Several Economic Surveys have expressed concern at functioning of the APMCs and the fact that they sponsor monopolies. Specifically, Economic Surveys for the years 2011-12, 2012-13, 2013-14, 2014-15, 2016-17, 2019-20 focused on the reforms required in this context," the survey said. It also highlighted the recommendations made on agri-market reforms since 2001, including by National Commission on Farmers chaired by M S Swaminathan and Taskforce on Employment Opportunities headed by Montek Singh Ahluwalia, among others.
The suggestions on marketing of agricultural produce include the need to provide a choice to the farmers to sell their products directly to a processing factory or the private sector, development of agriculture marketing infrastructure, amendment of the State APMC Acts and the Essential Commodities Act to ensure barrier-free storage and movement of agricultural commodities, it said.
The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 The Essential Commodities(Amendment) Act, 2020 -- are the three key legislations passed by Parliament in September 2020.
"The newly introduced farm laws herald a new era of market freedom which can go a long way in the improvement of farmer welfare in India," the survey said. Highlighting the benefits of the new farm laws, the survey said farmers in India have suffered from various restrictions in marketing their produce. There were restrictions for farmers in selling agri-produce outside the notified APMC market yards.
The farmers were also restricted to sell the produce only to registered licensees of the state governments. Further, barriers existed in free flow of agriculture produce between various states owing to the prevalence of various APMC legislations enacted by the state governments.
Further, the survey said that APMC regulations have indeed resulted in a number of "inefficiencies and consequent loss to the farmers". "The presence of multiple intermediaries between the farmers and the final consumers has led to low realisation by farmers.
"Further, a large range of taxes and cesses levied by APMCs cuts into farmers' price realisation while only a small proportion is ploughed back into the development of mandi infrastructure. Poor infrastructure at the mandis compounds the problem of price realisation for the farmers," it said.
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